On 19 July 2010, the German Federal Cartel Office ("FCO") decided to close the proceedings against the German branch of the US agency AP and the German news service ddp for not notifying their merger to the FCO.
The merger between AP and ddp took place in December last year and saw the owners of ddp taking over AP's German business. At that time, the transaction was not notified to the FCO. The FCO only opened the proceedings against DPA and AP after a complaint by the competitor DPA in April 2010 (for more details see Community Week issue 466).
The FCO has now decided that AP and ddp were not required to notify their merger as the turnover thresholds for the applicability of the German merger control were not met. Even though the FCO concluded that the transaction between two press agencies is to be regarded as a transaction in the press sector (i.e. like a transaction between two newspapers), the transaction was still not notifiable. There is a stricter merger control system in Germany for transactions in the press sector where special rules regarding the turnover calculation apply. According to sec. 38 para. 3 of the German Act against Restraints of Competition ("ARC") the turnover is multiplied by a factor of twenty in order to determine whether the thresholds for the applicability of the German merger control system as set in sec. 35 ARC are met.
However, in the present case, the thresholds for the applicability of the German merger control system were not met, even on the basis that the turnover of AP and ddp generated by typical press agencies activities (e.g. daily news services) were multiplied by a factor of twenty.
This decision shows that the FCO considers transactions in the press sector carefully and also adopts a broad approach as to whether undertakings are regarded as active in the press sector in order to prevent any concentration in the media sector and to safeguard diversity and pluralism of opinions in Germany. In this context, another peculiarity of the German legal system is worth noting - besides the FCO, the German Commission on Concentration in the Media ("KEK") is also responsible for national media concentration control in the area of nationally-transmitted private television.
To view Community Week, Issue 481; 23rd July 2010 in full, Click here.
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